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Ajay shivnarayan pandey

Ajay shivnarayan pandey (Querist)
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15 May 2013 Sir can u explain leverages i.e operating leverages

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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15 May 2013 Operating leverage measures the company`s level of fixed costs relative to its variable costs A company with high degree of operating leverage has a larger ratio of fixed costs to variable costs, and as a result has a higher breakeven point.

Aditya KHaitan

Aditya KHaitan (Expert)
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15 May 2013 The operating leverage of a business is the ratio of the change in revenue to the change in operating income. It is a way to measure the movement (up & down ) of the businesses earnings in relation to sales. A business with higher operating leverage is riskier than an equivalent business with lower operating leverage.